A divorce can alter many of the plans that a Florida resident may have made for their future. Aside from the incredibly disruptive experience of leaving a relationship that was once intended to last forever, a person may find that they are not as financially stable as they were when they were married. A party to a divorce may discover that they were either dependent on their ex for financial stability or that they were the sole source of their former partner’s capacity to financially survive.
As a result of circumstances like this, individuals may find that they are either the recipients of alimony or the payers of alimony. At present, individuals who pay alimony and are in alimony agreements or subject to alimony orders may deduct their payments from their taxable income. Individuals who receive alimony from their exes must include the payments they receive as income for the purposes of computing their annual taxes.
However, come the turn of the year, these rules will no longer be applicable to any individuals who enter into alimony agreements and those subject to alimony orders. Payers will no longer be able to deduct their payments and recipients will no longer have to declare their payments as income. Any individuals who enter into alimony agreements prior to the end of the calendar year will still be allowed to follow the present rules.
Now is an important time for individuals to talk to their divorce attorneys about their pending alimony obligations. It may make financial sense to secure alimony agreements by the end of December to avoid losing the opportunity to deduct alimony payments and alter one’s taxable income base.